On Wednesday, Truist Securities updated its outlook on Playa Hotels & Resorts (NASDAQ: NASDAQ:PLYA), raising the price target from $10.00 to $13.00, while reiterating a Buy rating on the stock. The adjustment reflects a valuation based on a 10.0x multiple of the company's expected 2025 EBITDA.
The firm's analyst maintains the 2024 EBITDA estimate for Playa Hotels & Resorts at $254 million, with the adjusted earnings per share (EPS) forecast increasing to $0.58, up from the previous $0.51. Looking ahead to 2025, the EBITDA projection has been revised to $247 million from an earlier estimate of $243 million. However, the adjusted EPS forecast for 2025 has been adjusted downward to $0.47 from $0.53.
The revised price target of $13 is informed by the company's trading multiples, with Playa Hotels & Resorts currently trading at 9.3 times and 8.2 times the firm's estimated EBITDA for 2024 and 2025, respectively. The analyst's commentary highlighted these multiples as a basis for the updated price target.
Truist Securities' new price target suggests a positive outlook for the stock, indicating a potential upside from its current trading price. Investors are likely to monitor the performance of Playa Hotels & Resorts closely, taking into account the firm's projections and the underlying assumptions driving these estimates.
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